You are browsing the archive for 2018 February 09.

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California Once Tried to Ban Black People

February 9, 2018 in History

By Erin Blakemore

Elizabeth Flake Rowan. (Credit: Public Domain)

When Peter Burnett took the podium in Sacramento in 1849, he faced a group of men like him—pioneers determined to take California from an upstart territory to a full-fledged state. He had been elected California’s first governor just a day before, and as he addressed his fellow legislators, he brought up one of the most explosive issues of his time: the place of black people in the future state.

California had decided to ban slavery after a heated debate, but Burnett’s vision didn’t include black residents at all. “It could be no favor, and no kindness, to permit [free blacks] to settle in the State,” he said, “while it would be a most serious injury to us….Had they been born here, and had acquired rights in consequence, I should not recommend any measures to expel them…the object is to keep them out.”

Burnett wasn’t alone in his vision of a California that banned black people. Throughout the 1840s and 1850s, California citizens and legislators fought to ensure that free black people would be prohibited from immigrating to or living in California. And though their efforts eventually failed, they reflected the fear and racism faced by black people in the American West.

Elizabeth Flake Rowan. (Credit: Public Domain)

California held both opportunity and danger for people of color, many of whom were freed slaves. Born into slavery, Elizabeth Flake Rowan had been freed when she entered California territory. After settling in what is now San Bernardino, Rowan helped build a fort, cared for the children and women of her community, and enjoyed the abundance of the young state. Though her daily life was relatively mundane—she lived with her husband, a barber, and raised three children while working as a laundress, she was perceived as a threat by Californians who wanted her and others like her excluded from the state altogether.

California’s move to exclude black people from the state had roots in the new state’s conflict over whether to allow slavery or not. At the time, a national debate raged over how to decide if the United States’ newest territories should be open to slavery, and opinion split between pro-slavery advocates—mostly from Southern states—and “free soilers,” abolitionists who wished to introduce more slave-free states and territories into the Union. …read more


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Don't Tax Spanish Olives — And Don't Subsidize them Either

February 9, 2018 in Economics

By Ángel Manuel García Carmona


By: Ángel Manuel García Carmona

In November 2017, Spaniards learned that the US Secretary of Commerce had decided to tax the import of black olives — between 2.31 and 7.25 percent — because these were being sold below market price. That is, the Trump administration decided the Spaniards were guilty of “dumping” olives.

As usual, the dumping was made possible by domestic subsidies. These came from the funds (nearly 40 percent of total budget) that the European Union (EU) dedicates to its Common Agrarian Policy (CAP). Spain receives more than €5 billion.

According to the EU, the CAP exists to boost agrarian production, thus guaranteeing a certain level of income to the agrarian population, “stabilizing markets,” guaranteeing the security of supplies, and ensuring “reasonable prices.” This interventionist strategy, however, exists to shield a sector that produces less than 2 percent of EU GDP.

The Costs of Tariffs and Subsidies

CAP policy has been problematic. One the one hand, the subsidies have caused a foreign backlash, leading to Trump’s tariff which harms Spanish producers — Spanish companies have lost many contracts with American buyers who have turned to olives from Egypt, Morocco, and Turkey instead). But another side effect of CAP has been harm inflicted on low-income countries that now cannot export their products into Europe.

Thus, thanks to CAP, Spanish industries are on both ends of this anti-trade equation. 

The US, however, is hardly a paragon of free trade.

After all, the US Department of Agriculture spends $25 million every year on subsidies for farm businesses, since the approval of 1862 Morrill Act. Some of those subsidies are for insurance, export promotion, and price-loss coverage.

A better approach would be to move more toward a system of virtually no agricultural subsidies at all, as is the case in New Zealand. In 1984, the New Zealand government passed a reform to eliminate farm subsidies. At the beginning, this was a cause for alarm among farmers.

However, the New Zealand agriculture sector has not suffered, and the number of farms has remained constant since the reform. More than 10 percent of the working population is linked to agriculture and around 90 percent of total farm output is exported. Contrary to the EU situation, agriculture represents almost a 7 percent of New Zealand GDP.

We Need Unilateral Free Trade

Bilateral trade agreements mustn’t be reviewed, but repealed

Bilateral trade agreements like CETA and NAFTA are …read more


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Uber Drivers Can Help to Explain the Pay Gap

February 9, 2018 in Economics

By Ryan Bourne

Ryan Bourne

The gender pay gap is a tricky concept for proponents of
“evidence-based policy”. The Government has introduced a
legal requirement for businesses with more than 250 employees to
publish average gender pay statistics. The rationale is for
“transparency”, apparently, though it does not take
Nostradamus to forecast how these will be used in public debate.
The demands for action will follow.

Yet what is rarely mentioned is that there is a large amount of
empirical literature in economics that explains why apparent
headline pay gaps exist. Controlling for occupation types, time in
the labour force, education levels, and market rewards for
unpleasant or unpopular work and more, the remaining
“gap” between genders almost entirely disappears. The
evidence for discrimination by sex is weak to non-existent. Judging
whether the somewhat different demand for “equal pay for equal
work” is achieved is likewise heavily dependent on how you
define “equal work”, given the nature of different

Many would argue, with some reason, that societal expectations
of women shape occupation choice, tasks assigned, the nature of pay
negotiations, and decisions on how to care for children. If all
male advantages in these areas were eliminated, so is implied, the
sexes would be equally represented across jobs. Pay gaps for the
same work would likewise be eliminated.

But is a 50-50 occupation split and pay gap elimination likely?
There were already reasons to be severely doubtful. In Scandinavian
countries with extensive pro-family policies, preferences for child
caring and careers still seem to result in higher pay for men.

In the UK, male models are unlikely, on average, ever to be paid
as much as female. An innovative new study sheds further light,
showing pay gaps still exist even in markets where contractors do
the same job and workers set their own hours.

A new paper on ride-sharing app Uber shows male drivers, on
average, earn 7pc more per hour than their female counterparts in
the USA. This is remarkable. Drivers have full flexibility to work
when they like, pay rates are fixed and transparent, there are no
earnings negotiations and customers do not appear to care about the
gender of their driver. Almost all the explanations about the
patriarchal nature of business environments and how non-women
friendly the working hours are therefore fall away. And yet there
is still a pay gap.

Why? The study’s authors Cody Cook, Rebecca Diamond, Jonathan
Hall, John List and Paul Oyer drilled down into what was happening
in Chicago, and found three factors fully explain the

First, men were likely to have more experience using the app,
and so make more efficient decisions to boost earnings. Though men
and women experienced very …read more

Source: OP-EDS

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Why Democrats Are Obsessed with Russia

February 9, 2018 in Economics

By Ted Galen Carpenter

Ted Galen Carpenter

The issue of Russia’s alleged interference in the 2016
U.S. presidential election has intensified an already deep and
bitter partisan divide. Democrats and the broader progressive
community argue that a hostile nation worked to defeat Hillary
Clinton and install a president that Moscow could influence,
perhaps even control. Those allegations have become increasingly
shrill and over-the-top. In the process, they have chilled debate
on U.S. policy toward Russia and created an atmosphere of
intolerance and guilt-by-association disturbingly reminiscent of
the McCarthy era in the 1950.

It is astonishing how outlandish some of the comments have
become. A recent example was the speculation that MSNBC contributor
John Heilemann engaged in when Devin Nunes, chairman of the House
Intelligence Committee, sought to make public the memo that the
committee majority approved about possible FBI abuses during its
investigation of collusion between the Trump campaign and the
Russian government. Heilemann asked Democrat Sen. Chris Murphy:
“Is it possible that we actually have a Russian agent running
the House Intel Committee on the Republican side?” It was the
second time that Heilemann raised that absurd
notion on air.

Even if one concedes the
allegations that Russia engaged in election meddling, the response
of progressives is wildly excessive.

Other progressives have wildly exaggerated the supposed Russian
threat to America’s security and domestic liberty. During the
2016 campaign itself, Clinton asserted that Donald Trump would be
Putin’s puppet.” The accusations
have grown wilder and more inflammatory since then, as Democrats
hype the dangers that Russia’s apparent election meddling
posed. During a March 2017 House Homeland Security Committee
session, Democrat Rep. Bonnie Watson Coleman accused Russia of
engaging in outright warfare against the United States.
“I think this attack that we’ve experienced is a form
of war, a form of war on our fundamental democratic

She was hardly unique in using such hyperbole. During House
Intelligence Committee hearings that same month, several of Coleman’s Democratic
colleagues made similar alarmist statements. Democrat Rep. Jackie
Speier insisted that Russia’s activities were indeed
“an act of war.” Democrat Rep. Eric Swalwell echoed
that assertion. Citing the alleged Russian hacking of the
Democratic National Committee and other targets, Swalwell stated:
“We were attacked by Russia,” and that attack
“was ordered by Vladimir Putin.” Democrat Rep. Denny
Heck explicitly compared Russia’s actions to the Japanese
attack on Pearl Harbor and the 9/11 terrorist attacks. Worries
about Russia, he insisted, had nothing to do about politics.
Instead, “this is about patriotism … this is about
country, and the very heart of what this country is built on, which
is open, free, trusted elections.”

Such threat inflation is not confined …read more

Source: OP-EDS

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Paul Krugman Should Love President Trump’s Infrastructure Plan

February 9, 2018 in Economics

By Robert P. Murphy

Krugman MAGA_9.png

By: Robert P. Murphy

America’s most famous Keynesian, economist Paul Krugman, predictably used his New York Times column to excoriate President Trump’s State of the Union infrastructure proposal. Yet ironically, Krugman’s own positions on the economy and climate change should lead him to applaud Trump’s ideas. This is just another episode where Krugman displays his partisanship, rather than fidelity to his ostensible goals for the public.

Right off the bat, Krugman is in an awkward position, because back when he thought Hillary Clinton was going to be the next president, Krugman stressed the need for more infrastructure spending. For example, in a column from August 2016 titled, “Time to Borrow” (!), Krugman wrote:

The campaign still has three ugly months to go, but the odds — 83 percent odds, according to the New York Times’s model — are that it will end with the election of a sane, sensible president. So what should she do to boost America’s economy, which is doing better than most of the world but is still falling far short of where it should be?

There are, of course, many ways our economic policy could be improved. But the most important thing we need is sharply increased public investment in everything from energy to transportation to wastewater treatment.

How should we pay for this investment? We shouldn’t — not now, or any time soon. Right now there is an overwhelming case for more government borrowing. [Bold added.]

Well, it turns out that the NYT’s model gave Krugman a false sense of security, since his “sane, sensible” choice didn’t end up winning. After Trump’s surprise election, Krugman—being Krugman—suddenly flipped in his economic analysis. After the August 2016 column we just cited—titled “Time to Borrow,” remember—Krugman then wrote a column in early January 2017 titled, “Deficits Matter Again.” (Of course they do—a Republican is in the White House again!) And, if Krugman flipped on the wisdom of government deficits, he also now must be a massive opponent of Trump’s proposed infrastructure plan.

How Can Krugman Oppose a Giant Infrastructure Plan?

So how does the Nobel laureate pull this particular rabbit out of the hat? Here’s Krugman’s case, from the recent column following Trump’s State of the Union address:

[W]hile we desperately need new investment in public capital, Trump’s proposal – Trumpfrastructure? – isn’t remotely serious. At best, it would be a trivial sum of money pretending to be something big. At worst, …read more


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Is This Week's Mini-Crash Just the Beginning?

February 9, 2018 in Economics

By Brendan Brown


By: Brendan Brown

According to the mainstream narratives, a state of inflation alert was the catalyst to the US stock market mini-crash of February 2 and February 5, 2018. This explanation echoes the run-up to the October 1987 stock market crash. On other occasions in history, inflation alerts have not had such an immediate effect, with the pull-back of asset price inflation (which typically leads reported goods and services inflation) waiting for a substantial tightening of monetary policy.

Now everyone and his dog realizes that an inflation “break-out” (from inertia under the 2 per cent standard) would mean a bigger take for Uncle Sam and an eventual crash and recession. Some investors who have been riding the “hunt for yield” train decide it is time to get off, but on approaching the exit they encounter a stampede of like-minded people. Asset prices have gapped down or, worse, the market has seized up. Aggravating the stampede is the arrival of fellow-investors who have suddenly discovered the state-of-the-art products and services they — during the hunt for yield — have blown up.

Many decide to postpone their exit hoping for a quieter time in the future. The history of the stampede and the realization that many of its one-time participants still “want out” weigh on markets and the economy going forward.

In autumn 1987, the trigger to the inflation alert had been the new Fed Chief (Alan Greenspan) hinting that he would no longer steer monetary policy towards bolstering the dollar in line with the Louvre Accord of early that year. Paul Volcker (the previous Fed Chief) had had late remorse for having pursued a policy of monetary inflation since the Plaza Accord of summer 1985 (where he had signed up for Treasury Secretary Baker’s dollar devaluation policy). In the first half of 1987, Volcker had been tightening policy, annoying the Treasury Secretary and thereby failing to gain a nomination for a further term. The Bundesbank quickly indicated that Germany (unlike Japan at the time) would not follow the US on this further journey into monetary inflation. The US-German policy divergence (underlined by Secretary Baker criticizing a Bundesbank rate hike) and the related dollar setback, triggered a US inflation alarm in the stock markets. 

The late Jude Wanniski, a well-known contemporary economist close to anti-Baker conservatives, saw this alarm as the crucial catalyst to Black Monday (October 19). Adding to the drama of the market quake was …read more


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The U.S. Bombing Campaign Against 'Taliban Heroin Labs' Is Bad Drug War Theater

February 9, 2018 in Blogs

By Phillip Smith, AlterNet

Feel-good macho posturing in Afghanistan isn't likely to end well.

On the night of November 19, small-time Afghan opium trader Hajji Habibullah finished his day's business at the local opium bazaar in Musa Qala, in Helmand province, and headed home to his family. He never saw the sunrise.

Helmand province is a poppy-growing powerhouse that for years has been hotly contested terrain in the battle between Taliban insurgents and the Afghan government and NATO forces. Under new authority from the Trump White House allowing the U.S. military to “attack the enemy across the breadth and the depth of the battle space, and also functionally, to attack their financial networks, their revenue streams,” U.S. and Afghan warplanes mounted bombing raids on “Taliban drug labs,” targeting three districts in Helmand. That night, Musa Qala was target one in a dramatic escalation in U.S. Afghanistan policy.

In a press briefing two days later, Gen. John Nicholson, commander of U.S. forces in Afghanistan, guided reporters through videos documenting the attacks, with bomb blasts destroying small structures as the general narrated strikes by U.S. B-52s and F-22 Raptors. The raid in Musa Qala destroyed “millions” in “opium cooking at the time of the strike,” repeatedly emphasizing how careful the raids were to minimize “collateral” casualties.

But the first bombs to fall on Musa Qala didn't fall on a “Taliban narcotics production facility.” They fell on Hajji Habibullah's house, killing him, his wife, his seven-year-old daughter and four sons aged between three and eight, as well as a visiting adult daughter and her year-old daughter. Only the son-in-law sleeping in a guest house on the property survived.

That's according to on-the-scene field research contained in a report released last month by the London School of Economics International Drug Policy Unit. The analysis, written by Dr. David Mansfield, who has been conducting research on rural economies and poppy cultivation in Afghanistan for the past two decades, is sharply critical of the Trump administration's aggressive new turn. Mansfield isn't the only one sounding alarms. Warnings that the policy is expensive and unlikely to achieve its objectives while …read more


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Democrats Are Targeting 12 States to Prevent Another Decade of GOP Gerrymandering

February 9, 2018 in Blogs

By Steven Rosenfeld, AlterNet

Electing governors across the Midwest and South could break the GOP lock on Congress and state legislatures.

Forget, for a minute, which party controls the House after November’s elections. There’s another decision that will be made this fall that will determine if Republicans will likely dominate the 2020s as they have this decade, in Congress and state capitals.

That fateful decision concerns whether the GOP will monopolize the process for revising political maps that will hold for a decade of congressional and state legislative elections starting in 2022. Ten years ago, after being trounced by President Obama and seeing Democrats take full control of Congress, Republicans plotted a comeback by targeting this same process in 16 states. They wanted to monopolize redistricting and they did, producing gerrymanders that diluted Democrats’ power.

On Wednesday, the National Democratic Redistricting Committee revealed its 2018 strategy. The NDRC is targeting 12 states it believes hold the key to preventing another decade of runaway Republican rule. Their strategy is not to turn the tables on the GOP—they can’t; they’re too far behind. Rather, Democrats hope to elect a slate of governors wielding veto pens and to retake enough state legislative chambers to force Republicans to negotiate sharing power. 

“During the last redistricting process in 2011, Republicans had trifecta control [the governor and both legislative chambers] in 19 states, which gave them complete power over the drawing of 213 congressional districts,” the committee said. “The NDRC is committed to changing that and making sure Democrats have a seat at the table in the 2021 redistricting process.”

“This is a critical election year for redistricting because it is the first cycle where the officials elected will serve during the redistricting process in 2021,” the NDRC continued. “NDRC is targeting 12 states during the 2018 election cycle, including 9 gubernatorial races, 20 legislative chambers, 2 ballot initiatives, and 2 down-ballot races. There are 8 additional states on our Watch List.”

While Americans keep hearing that the House will be up for grabs as 2018 is turning into a blue wave year, these statewide races—especially for governor where …read more